Correlation Between Hung Sheng and Yummy Town
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Yummy Town at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hung Sheng and Yummy Town into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hung Sheng Construction and Yummy Town Cayman, you can compare the effects of market volatilities on Hung Sheng and Yummy Town and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hung Sheng with a short position of Yummy Town. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Yummy Town.
Diversification Opportunities for Hung Sheng and Yummy Town
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hung and Yummy is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Yummy Town Cayman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yummy Town Cayman and Hung Sheng is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hung Sheng Construction are associated (or correlated) with Yummy Town. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yummy Town Cayman has no effect on the direction of Hung Sheng i.e., Hung Sheng and Yummy Town go up and down completely randomly.
Pair Corralation between Hung Sheng and Yummy Town
Assuming the 90 days trading horizon Hung Sheng Construction is expected to generate 1.12 times more return on investment than Yummy Town. However, Hung Sheng is 1.12 times more volatile than Yummy Town Cayman. It trades about 0.13 of its potential returns per unit of risk. Yummy Town Cayman is currently generating about -0.14 per unit of risk. If you would invest 2,565 in Hung Sheng Construction on September 5, 2024 and sell it today you would earn a total of 115.00 from holding Hung Sheng Construction or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hung Sheng Construction vs. Yummy Town Cayman
Performance |
| Timeline |
| Hung Sheng Construction |
| Yummy Town Cayman |
Hung Sheng and Yummy Town Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and Yummy Town
The main advantage of trading using opposite Hung Sheng and Yummy Town positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Yummy Town can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Yummy Town will offset losses from the drop in Yummy Town's long position.| Hung Sheng vs. Chainqui Construction Development | Hung Sheng vs. Kee Tai Properties | Hung Sheng vs. BES Engineering Co | Hung Sheng vs. Zinwell |
| Yummy Town vs. Mercuries Life Insurance | Yummy Town vs. Hung Sheng Construction | Yummy Town vs. X Legend Entertainment Co | Yummy Town vs. WINSON Machinery Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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